The one-woman show, "My Name is Rachel Corrie," which opened this week, is based on diaries and e-mails written by the 23-year-old, who was killed on March 16, 2003, while trying to prevent a demolition of a Palestinian building.
Producers of the off-Broadway play, directed by Alan Rickman, announced on Thursday night it had been extended until the end of the year at The Minetta Lane Theatre.
The play had been a hit in London and was scheduled to open earlier this year at the New York Theatre Workshop, but was pulled amid Middle East tensions heightened by former Prime Minister Ariel Sharon's illness.
The theater said it was postponed after discussions with people in the arts, religious leaders and representatives of the Jewish community.
"New York's response to the play has shown that it should always have been shown, and of course it could be seen, in the United States," the play's editor, British journalist Katherine Viner, told Reuters on Friday.
"Americans are open to this kind of debate, this kind of subject matter."
Corrie has long been a contentious figure, with critics accusing her of being naive and not giving equal weight to Israeli victims of Palestinian attacks, and supporters praising her for defending Palestinian civilians.
An Israeli investigation concluded her death was an accident, but her family says there are discrepancies in the report and has urged the US government to demand an independent investigation into her death.
The Corrie family has circulated a June 2004 letter to Corrie's parents from then chief of staff of the US State Department, James Wilkerson, saying the US Government did not
consider the Israeli investigation "thorough" or "credible."
Viner said it was "Very disappointing" the play was initially canceled as it was "Very much an American play," adding it was more about Corrie's "evolving political identity" than a monologue about the Middle East.
"We wanted to present Rachel as a whole human being rather than Rachel just as the woman who was killed in Gaza," she said.
Some reviewers this week said the play did not deserve the controversy, including New York Times' Ben Brantley who doubted audience members were "inspired by the sort of partisan politics that have made the play a topic of such a bruising debate in New York."
Now that the play had finally arrived, he said, "Many theatergoers wonder what all the shouting was about, especially in a town where one-person shows expressing extreme points of view are common theatrical fare."
The play is "Not an animated recruiting poster for Palestinian activists," he said, but is an "invigoratingly
detailed portrait of a passionate political idealist in search of a constructive outlet."
The New York Observer's John Heilpern said "after all the uproar and bitter controversy," Corrie's writings "turns out to be a poignant, modest and humane play" while USA Today said "If her views provoke emotions and inspire debate, isn't that the purpose of art?"